Depending on the homeowner’s situation, there may be one or more options for foreclosure prevention. Some general tips to remember:
• Assess what options, if any, are available for the homeowner’s loan type and/or what options are available through the servicer for non-guaranteed mortgages.
• After finding out which options the homeowner may be eligible for, calculate a target payment for the best option.
• After determining what the homeowner is able and willing to pay or whether the homeowner can pay the target payment, prioritize the options based on their affordability. For example, if a homeowner’s interest rate is high and they’re underwater, aim for a loan modification; but if they are only a few months behind and they have the ability to catch up on their otherwise affordable mortgage, then the advocate may want to suggest a repayment plan.
• Advocates should never guarantee results or request specific target amounts. Never say, for instance, “You only need an additional $500 a month to qualify” or “I guarantee that you’ll get a 30% reduction.”
In the following sections, we often refer to homeowners as borrowers to be more specific. Borrowers are responsible for the mortgage and qualify for loss mitigation options. There may be some instances where the homeowner is on the deed but not on the mortgage and would be unable to work with the lender directly.